OPR in focus
THE Monetary Policy Committee (MPC) meeting of Bank Negara is scheduled for this week, with most economists expecting the central bank to maintain the overnight policy rate (OPR) at 3%.
According to a Bloomberg poll, all seven analysts surveyed are expecting Bank Negara to keep policy rate unchanged at 3%.
UOB Global Economics & Markets Research continues to expect the OPR to remain unchanged at 3% at this meeting and through 2024.
It said key upside risks for inflation include volatile commodity prices and changes to domestic subsidies policy and price controls as well as cash aid and wage adjustments.
Standard Chartered anticipates core inflation to stay benign as it expects Bank Negara Malaysia to maintain OPR at 3% this year on the inflation front.
It seems that the central bank views the monetary policy stance as supportive of growth, which is likely to slow in the first half of 2024, Standard Chartered said.
Singapore inflation
PRICE pressures in Singapore likely persisted at the end of 2023, with December headline inflation likely settling at 3.6% year-on-year (y-o-y), according to ING.
ING said there was an unexpected dip in CPI in November and there is a possibility of prices increasing by 0.2% on a month-on-month (m-o-m) basis.
It said the Monetary Authority of Singapore is likely to maintain its current policy settings at its first meeting of the year, as core inflation, the central bank’s preferred inflation gauge, is expected to remain at 3.2% y-o-y.
China LPR
ACCORDING to a Bloomberg poll, all seven analysts expect no change to the one-year loan prime rate (LPR) at 3.45%.
Of the seven analysts, six also expect no change to the five-year LPR at 4.20% while a sole analyst expects a 10-basis-point (bps) cut to 4.10%.
UOB still sees prospects for the one-year and five-year LPR to fall by 10 bps to 3.35% and 4.10%, respectively, in the first quarter of 2024 (1Q24) and remain flat through end-4Q24.
